Grollo dumped from Coburg

The Grollo Group’s Equiset company is considering legal action after being dropped as preferred developer for a $1 billion urban renewal project in Melbourne’s northern suburbs.

Moreland City Council announced on Tuesday that Equiset would no longer be involved in the Coburg Initiative after a financial disagreement between the two parties.

Equiset managing director
Lo­renz Grollo
said the council had provided no justifiable reason for ending the agreement.

“We reject the council’s decision and the inadequate reasons proffered to justify it," he said.

“But as a dynamic and growing group, Equiset must now move on from this sheer waste of three years’ hard work and concentrate on its interests in new Docklands developments and other projects."

Moreland City Council chief executive Peter Brown said the agreement with Equiset broke down after the terms for a $120 million residential project – the precursor of the development – could not be agreed.

Mr Brown said the Equiset proposal would have seen the council shouldering all the development and financing risks from the project.

He said the council would now engage in further discussion with the community about the project and reassess it early next year.

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The Coburg Initiative encompasses 12 hectares of land mooted for development into 6000 dwellings, commercial office space and retail outlets.

Mr Grollo said the council had presided over a long list of development failures.

He cited the recent cancellation of Healthscope’s $150 million development of the new John Fawkner hospital in Coburg.

It is a particularly low blow for Grollo, who was awarded the Coburg project against a background of his family’s strong connections to Melbourne’s northern suburbs, where the Grollo compound is located.

Moreland mayor Oscar Yildiz thanked Mr Grollo for his support on the project but said the relationship with Equiset was ended after the parties failed to reach an acceptable financial agreement.

“It has given us confidence that this project has the right ingredients to be a great success," he said in a statement.

“However, we need to ensure we can deliver it using a financial model that does not present a financial risk for the current and future communities."

Mr Grollo said Equiset had lost tens of million of dollars on the project and it was now considering legal action against Moreland City Council.